IP Targeting May Replace The Cookie, Says AcquireWeb

AcquireWeb is not a new, bootstrapped startup – but it could be labeled an evolved one with a new home in display advertising.

CEO Al Gadbut describes his 27-person company, launched in 2001, as “a marketing data technology company focusing on customer identity integration within the digital space.” When the Foster City, California-based company started out, it was primarily focused on helping clients with database marketing, building out more robust email lists and bringing offline data online, or vice versa.

Today, AcquireWeb helps with web analytics, site optimization and targeting for display advertising, and has enjoyed a 300% increase in its online business in the past year, according to Gadbut.

He adds that AcquireWeb is ready if the cookie goes away in display, too.

AdExchanger spoke to Gadbut recently about his company, its products and industry trends.

AdExchanger: What problem is it that AcquireWeb is solving?

AL GADBUT: In a broad sense, we help clients begin to understand where and who their customers are across their different databases. We have an expertise in identifying who might be a customer in one database, but also linking that to another customer in another one of their databases, with an emphasis on using digitally specific data. We help make those linkages. By virtue of having that expertise, it also allows us to help them move their offline data into an online environment for digital display targeting or even website optimization.

Who do you think of in your competitive set?

There are many companies that work on database intelligence, data targeting and that sort of thing. [In] each of the areas that we work there are competitors. In the area of database integrations, we have a lot of expertise on the digital side. Traditional companies are fantastic at understanding offline customer data and consumer records in the offline world. It might be a work address, home address or nickname that doesn’t translate well into an exact match against a consumer record; there are companies that [bring that together] very well. But those same companies tend to fall down when you’re talking about integrations with regard to online data.

We can do the offline stuff, but the infrastructure that a lot of these guys have is just huge and can't really compete there. Yet when you're talking about online data, we can provide a lot of intelligence and get people to places that they can't get [to] otherwise.

Regarding the customer identity requests and things like that, what are the big challenges right now?

The big thing over the last several years for a lot of large marketing groups within large companies has been to try and create a web presence – whether a straight-up web presence through a newsletter email or...a list from which people can download white papers [or] from the social side, to “like” or engage with a company through social media, whether it’s Facebook, Twitter and so on.

At some point, many of these large companies realized that it may be a good idea to figure out how to bring some of their online data into the “mothership” of the offline database too. They looked to “mine” from the standpoint of marketing and monetization.

So their offline database has been traditionally built with name, title and business name – or, on the consumer side, name, [home] address and that type of information, including the phone number.

In the online world, more recently, the phone number now may be a mobile. The record may carry an email address and a first name and last name. You can't translate that easily into an offline data set. That’s where a company like AcquireWeb can step in and help.

Among your clients, what’s the most popular use case for working with AcquireWeb?

We have a large project going on right now with one of the top retailers in the world, and we’re helping them exactly with what I just described – pulling databases together from disparate data sources that they own. We also work with a number of clients across a wide spectrum of verticals, helping them move their offline data into an online “cookie-able” environment that allows them to target display messages to [customers].

Can you go deeper here? How might that work for a particular customer that they're trying to reach?

For example, we have an insurance client, and they market within specific markets within specific DMAs. They understand with their product offering that they want to...get in front of things like “age” and “income” to [address customers].

Now, when you're out in the marketplace, you can buy targeting that generally has an accuracy level to a DMA, which means you're spraying across the DMA. There’s a tremendous amount of waste there. By working with us, we can help them identify discreet neighborhoods that they want to be able to market in and cut away the waste of the other neighborhoods, so to speak. They would provide to us their targets, their target neighborhoods, perhaps even the demographics. And there’s no PII (Personally Identifiable Information) in what we’re doing.

By creating those targets, they can go to market and reach those market pockets that they're aiming for with their display advertisement.

Do they need cookies to facilitate the effective use of your product?

Unfortunately, yes. To be able to buy on almost every platform, you have to have cookies. Right now – and I say only “right now” – that seems to be the currency for being able to buy targeted display. We do have the capacity to translate that data into a cookie, but we’re not beholding to a cookie so that when Firefox and possibly IE down the road decide to not use cookies, we’re going to be in position...to help these clients continue to both get effective targeting and, more importantly, get reach that they couldn’t get otherwise.

If they don’t use cookies, what will they use?

My sense is that there are several companies that are experimenting with the idea of IP address. The notion of IP address is it’s PII. But unless you're getting a feed from an issuer of an IP address – such as an ISP or a telcom – it’s difficult to make the argument that it’s PII. My understanding, even with the telecoms participating in that type of targeting, [is] they're still not providing PII.

At this point, as I see it, IP address is not associated with PII, at least in this application. I know that there are people out there [who] view IP address as PII. That’s not part of a discussion here. That’s an argument that you can go back and forth a number of different ways.

Can the sort of matching that you're doing help within a household – for example, there are four members of the family using a single computer – or is it just one “leg” of the stool to create addressability?

It’s both an argument and a request that we get from several platform partners that we work with. They're looking to create both reach and, under targetability, accuracy to the household level. We've been working in this area for over four years now. I'm not comfortable saying that the IP address is targetable to [even] a household.

But, with pretty high confidence, you can get to a significant population at the neighborhood level.

Where do you see the momentum among the digital channels that your clients want help with?

Mobile is something that everybody is concerned with. What’s interesting across all the [mobile] traffic that we see...the vast majority that are engaging with a traditional browser on their mobile device are connecting through Wi-Fi connections and not connecting through a phone connection.

That means that they're going to be capable of seeing video as well as rich banner display. Then, of course, being able to delineate that between tablets and laptops from smartphones – which are going to have a different type of ad unit. From our data perspective and targeting perspective, there’s not a lot of difference between mobile and, say, even a desktop computer.

But what we’re seeing the most excitement around is the concept of reach. It seems to me that most of the players in this marketplace are getting pressure from their existing clients because they've overpromised what they might be able to do. I've talked to several clients who have done analyses and determined that even the household level linkage that they thought they were getting doesn’t always pan out...which shouldn’t surprise anybody, particularly among younger users, where there’s a tremendous number of sharing among devices.

Now, in that household, the person who first navigated to the site is essentially targeted. You can see how there could be a lot of...fallibility in that type of targeting. When you're dealing with direct marketers who are in an ever-increasing arms race to measure the last micron of the earth, you could see how they could get all riled up when they're not connecting to exactly the right person.

For us, what we find is...you're stuck in that area where there’s probably a reliable 25 million people [who are] targetable based on PII, maybe as many as 20-30 million devices. Of course the IDs of those cookies are dropping off all the time. By virtue of the way in which they're set and identified, you can't reset that cookie until somebody comes back to whatever site they self-identified on. It makes it very difficult for a marketer to get scale.

We’re seeing a lot clients coming to us saying, “If you can help us get scale and you're at the neighborhood level, that’s good enough for us.” We segment away all the rest of the population that aren’t close enough proximally to a given store or don’t have the right make-up, whether it’s education or age and so on. We can help [clients] zero-in on the neighborhoods they're looking for. In terms of scale, we can get them generally in the neighborhood by ten times of what they're currently able to get based on PII.

What do you think the difference is in terms of reach of consumers through Wi-Fi today versus their cell phone’s signal? Any thoughts on the evolution of reach through Wi-Fi?

When you're talking about the communication channel, things like email, text or in-app-based messaging, you're still looking at a mobile IP-based, telecom-based connection. [It's] been said that for years [telecoms have] an infrastructure problem and that they cannot support the type of consumption of bandwidth that’s currently available through traditional cable and localized Wi-Fi connections. Therefore, most of these devices are set [so] that when you move to a browser, they're actively searching for a nearby Wi-Fi...to connect and move content across. I don’t think that’s going away. I don’t see that the telcoms are anywhere near to solving that issue.

But you're still going to have people who are connecting via their telcom, their wireless carrier for some limited browsing, and certainly for their email and for their in-app kind of display.

What do your clients look like today? Are you trying to sell through intermediary platforms?

When we first thought of this space, we thought it was going to be fairly straightforward. You were just going to be able to pull some data together, and maybe you can port to a single point of connection, like a DMP, where your data could then be disseminated and available across the web. It turns out that just isn’t really the case.

The big problem that I see is that the half-life of cookies is decreasing precipitously. It wasn’t even a year and a half ago that the half-life of cookies was six to eight weeks. Now the cookies last less than four hours. You have a disconnect developing in getting cookies deposited in your account at your DMP, and then having those cookies repointed out to your demand-side platform (DSP), where you might be transacting, for example.

It speaks to possible opportunities for either improving or replacing the cookie. Those are things that we’re definitely working on.

1 Comment

IP addresses change and change often. Whether I reboot my cable modem or take my laptop from my home to the office my IP address changes. When I'm at the office I could be sharing my IP with 10s, 100s or even 1,000s of people if going through a proxy server. Every time I pop into a Starbucks I have a different IP. Mobile further makes a case for why IP addresses aren't a viable solution for identification as I switch from tower to tower. Privacy compliance is important. A viable solution needs to be privacy compliant and reliable.